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Participants in defined contribution plans recognize that knowing basic investment strategies is important even though most haven't gained that knowledge, according to a new survey by
State Street Global Advisors and Boston Research Group.

“There's a gap between awareness and action,” said
Kristi Mitchem, senior managing director and head of defined contribution for SSgA, during a New York news conference Wednesday on the research.

For example, researchers found that although 65% of DC plan respondents think selecting a diverse mix of investments is important, only 33% feel knowledgeable about selecting that mix, according to the survey.

Also, 67% said it is important to know how to adjust the asset allocation, but only 30% said they felt knowledgeable about making the adjustments, the survey said.

According to a report about the survey, 78% of respondents said it was important to determine how much is needed to “have a secure retirement,” but only 33% said they knew how to do it. And 82% said it was important to make retirement savings “last a lifetime,” but only 28% expressed knowledge how to achieve it.

Ms. Mitchem pointed to other elements of the research that illustrated DC plan participants' lack of financial understanding even though many make significant contributions to their retirement plans.

Only 9% of respondents in the survey said they were “extremely knowledgeable about financial matters,” while 39% said they were “fairly knowledgeable,” according to the survey. Meanwhile, 23% of participants contribute 15% or more of their pay to their retirement accounts; 19% contribute 10% to 14%, and 36% contribute 5% to 9%.

The survey “indicated that employees who engage more frequently in conversations about retirement show higher knowledge and awareness levels than those who do not,” according to a news release from SSgA. “More than 71% of participants reported having read about retirement during the past six months, and 64% said they read their statement. Employers should be encouraged to engage with participants more regularly about retirement and to repeat messages regularly using different mediums.”

The SSgA and Boston Research Group survey was based on 1,034 responses of participants in 401(k), 403(b), 457 and profit-sharing plans. The Internet survey was conducted in April among participants who were actively contributing to their plans. The participants were chosen at random and were not necessarily clients of SSgA.